• Dr. Sharanappa Kilarahatti
• CMA Dr. Jeelan Bash V

This study investigates the impact of asset quality (NPAs) on the profitability of Indian Public and Private Sector Scheduled Commercial Banks. The analysis is based entirely on secondary data sourced from the Reserve Bank of India (RBI) and banks' annual reports, covering a 10-year period from 2015 to 2024. The study encompasses the entire population of Indian public and private sector scheduled commercial banks. Gross NPA and Net NPA ratios are considered as independent variables, while profitability indicators like Return on Equity (ROE), Return on Assets (ROA), Net Profit Margin (NPM), and Net Interest Margin (NIM) serve as dependent variables. The study employs descriptive statistics and multiple linear regression analysis to examine the relationships. Findings of the study reveals that the Gross NPA Ratio exerts a statistically significant and negative effect on ROE (β = -1.603; p = 0.001), ROA (β = -0.117; p = 0.002) and NPM (β = -1.237; p = 0.002).These models demonstrate high explanatory power, with R² values exceeding 80% and adjusted R² values above 75%, indicating that higher levels of distressed assets substantially weaken overall profitability.However, Net NPA Ratio is found to be statistically insignificant in these three models, suggesting that adequate provisioning helps mitigate the impact of bad loans. In contrast, Net NPA Ratio shows a significant and negative effect on NIM (β = -0.262; p = 0.019), implying that an increase in net NPAs directly reduces the bank's interest margin. All the regression models satisfy the key assumptions of diagnostic tests including normality, homoscedasticity, and absence of autocorrelation. Hence, the models are statistically sound and well-fitted.

Non-Performing Assets, Indian Banks, Profitability Positionand Linear Regression Model.

"EFFECT OF NON-PERFORMING ASSETS ON PROFITABILITY OF INDIAN PUBLIC AND PRIVATE SECTOR SCHEDULED COMMERCIAL BANKS", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.12, Issue 8, page no.100-104, August-2025, Available :http://www.jetir.org/papers/JETIRHB06020.pdf

"EFFECT OF NON-PERFORMING ASSETS ON PROFITABILITY OF INDIAN PUBLIC AND PRIVATE SECTOR SCHEDULED COMMERCIAL BANKS", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.12, Issue 8, page no. pp100-104, August-2025, Available at : http://www.jetir.org/papers/JETIRHB06020.pdf